Lord Dearing: My Lords, I have no intention of commenting on the current Bill before Parliament, but some years ago I was appointed top man in a large organisation where much needed to be done. A stream of initiatives flowed from me. It took me about a year to realise that that was totally counter-productive; large organisations can cope only with a few things at once. Is there anyone in the machinery of government—say, in the future legislation committee—who can act as the devil's advocate and say, "No, we have done too much already. Leave it alone"?

Lord Goodhart: My Lords, is the Minister aware of one of the main reasons why the costs of services, particularly for criminal legal aid, are going up enormously? The Government give us a new criminal justice Act every year, which simply piles more offences on the existing number and creates more legislation to be considered by the courts?

Baroness Miller of Hendon: My Lords, it is with some disappointment—indeed, with quite a lot of regret—that I have to take up your Lordships' time by bringing back this amendment for the third time. I am compelled to do so simply because I have been unable to extract from the Government any firm commitment about the practicalities of the operation of this new concept of additional paternity leave, both for the protection both of the employers of the putative father, who will be required to provide the facilities for such leave, and, no less important, of the Inland Revenue, which will be able to finance it. What I find curious about the Government's attitude is that each time I have raised this matter in previous stages, they have unequivocally accepted the principle of what I seek to do. My objective is to substantially reduce the possibility of fraudulent claims, although of course they can never be entirely eliminated; to provide the employer of the person claiming additional paternity leave with the right to assume that he is entitled to it without having to conduct difficult and intrusive investigations; and to ensure that an employer who meets such a claim in good faith is not later penalised by the Inland Revenue if a double claim is made on more than one employer.
	In the consultation Work and Families: Choice and Flexibility, which took place in February 2005, some 15 months ago, the Government offered three choices: first, self-certification by the mother and father; secondly, self-certification by the parents combined with confirmation by the mother's employer; and, thirdly, compliance checks made by the Inland Revenue. In repeating those three options to the Grand Committee, the Minister told noble Lords that:
	"From that consultation, it became clear that self-certification from the mother and father . . . with confirmation from the mother's employer that the mother was entitled to maternity leave and/or pay and has notified her intention to return to work was the preferred option".—[Official Report, 9/3/06; cols. GC342-43.]
	Noble Lords can compare the unequivocal wording of the Minister's statement with that used in my amendment. I simply cannot understand why that should not be the end of the matter.
	However, by the time the Bill was reported to your Lordships' House, the Minister had given no indication that that is how the proposed regulations would be framed. I therefore brought the amendment back on Report. The Minister again provided warm words of assurance, or reassurance, by saying in almost identical terms:
	"From that consultation it became clear that self-certification by the mother and father of their eligibility, with confirmation from the mother's employer . . . was the preferred the option".
	He went on to say that the option,
	"keeps bureaucracy to a minimum while limiting the potential for errors in payment or abuse of the system".—[Official Report, 25/4/06; col. 109.]
	So I assumed, once again, that the matter was settled. But after Report I was again told by the department in a conversation held on 4 May—I thank the Minister for arranging it—that it was still consulting on this matter with such bodies as the TUC, the Mothers' Union, the Federation of Small Businesses, the Engineering Employers' Federation, the Equal Opportunities Commission and the Institute of Directors. Incidentally, I was amazed to be told that certification by the Inland Revenue was one of the options still under consideration. How does that conform to the Minister's stated objective, which I have just quoted, of keeping bureaucracy to a minimum?
	I am sure that the Government are not seriously suggesting that the Commissioners for Revenue & Customs should send out hordes of inspectors to check whether claimants for additional paternity leave are doing their fair share of nappy changing and looking after the baby's siblings; I am certain that that is not what is in mind. They would simply ask the claimant to fill in a claim form saying that the person concerned is entitled to the benefit. If that is not self-certification, then simple, plain English has lost its meaning. I am at a loss to understand why the Government are still pursuing a policy of consulting on the outcome of a consultation which reached a definite conclusion and talked about the preferred option, as the Minister has twice reported during the progress of the Bill through this House. It is therefore totally puzzling why the Government refuse to climb down from the fence on which they appear to be impaled.
	It is not for me to impute motives; I would not do so anyway, as the saying goes. But if I were to do so, I would say that the reason might be found in the corridors of the usual suspect: the Treasury. It will have to bear the cost of this well-meaning legislation. Consultations about the implementation of the conclusion of extensive consultations and reconsulting consultees sounds very much like kicking the project into touch.
	I say at once that I clearly have no desire to impose any kind of timetable on the Government for the implementation of additional paternity leave and its imposition on employers—that, of course, is a matter for the Government—but, to coin a phrase, the smack of firm government is required to end the uncertainty. The Government need to announce a clear, unambiguous decision on how the benefit will be eventually implemented.
	The House may recall that in Committee I called a vote on redundancy pay. In doing so, I said that it was quite shocking that so many Bills are now becoming enabling legislation with huge, long timetables, where consultations take place, more consultations take place and then, when we think we have got there, another consultation takes place. The Bill started 15 months ago; it has finished its passage through the Commons and we are at Third Reading. When the Bill is passed there will be no further chance to deal with these matters. I understand from the meeting with the Minister on 4 May that draft regulations will be published around summer 2007 and, from memory, that the Bill could be implemented by the end of 2007, or perhaps October 2007. That will be four years, which really is too bad. The reason I divided the House previously was to say to the Government that we should not legislate in this way; that when we pass Bills, we should know what we are passing. My amendment would introduce what the Government themselves describe as the preferred option. I beg to move.

Baroness Walmsley: My Lords, the amendment is a composite of various amendments that have been tabled at different stages of the Bill. They all relate to the regulations which surround ordinary paternity leave; that is, the up to two-weeks' paternity leave which a father is able to take during the first eight weeks of the baby's life.
	The amendment introduces three areas of flexibility to the arrangements for that leave. Subsection (2) of the proposed new clause introduces flexibility to how the leave can be taken. With the employer's agreement, the father could take those two weeks of leave either as two separate weeks, as two weeks together or as individual days. However, I stress that that would be with the employer's agreement. The two parties must agree on a way in which the father's leave can be taken that is convenient for the employer.
	Subsection (3) would give increased flexibility to the period during which the leave can be taken. It would increase it from the first eight weeks of the baby's life up to at least the first six months of the baby's life, or possibly up to the first year. Subsection (4) proposes that a reasonable and proportionate amount of notice be given by the father before taking the leave which he has negotiated with his employer.
	As your Lordships will see, the three areas of the amendment are linked. Their purpose is to increase the number of fathers who take the maximum amount of leave to which they are entitled. As a result, fathers would be able give support to mothers and have the opportunity really to bond with their child. The whole family would be able to bond as a unit.
	We all know that fathers who are well bonded with their child are highly unlikely to abandon them later in their lives, even if they are separated or divorced from the child's mother. I think that we all agree that every child needs a father, even when the father does not live with the child. The Government should do anything they can to improve the father's opportunities to bond with the child in those early days.
	On Report, the Minister said:
	"To argue that the two weeks' ordinary paternity leave should be taken at a time of the father's choosing, up to a year following the birth, is to ignore the purpose of ordinary paternity leave".—[Official Report, 25/4/06; col. 128.]
	I really do not agree. It should be for families to decide how best to organise their family life, in relation not just to ordinary paternity leave, but to the rest of their working lives. I refer to our previous debates on the right to ask for flexible working. Far too many parents see very little of their children, which is not good for the family, the parents or the children. We see the result in bad behaviour in schools and even in youth crime.
	The Minister also said:
	"Extending the time over which paternity can be taken would reduce certainty for employers at a time when we are bringing in other measures to increase certainty for employers, such as extending the period of notice women must give if changing their return from maternity leave". [Official Report, 25/4/06; col. 129.]
	In contradiction to that, at the same time, the Government are introducing additional paternity leave. I absolutely welcome that but I cannot say that it contributes to employers' certainty. I would point out that that additional paternity leave has a notice period of eight weeks. If eight weeks is enough for notice for an employer when the father is intending to take up to six months' leave then surely it is quite enough for employers to make the necessary managerial decisions and arrangements for a father who is going to take only two weeks. By the way, in subsection (2) of my amendment, he would be taking it at times, on days and in batches of time "by agreement with the employer". It all sounds very reasonable to me.
	In the same column, the Minister said that,
	"the leave must be planned for and managed by their respective employers".
	Later, he said that,
	"the notice period for paternity leave is a measure which protects employers, ensuring they have time to plan".
	I have no wish to increase the burden on employers. I have every wish to allow them adequate time to plan for this ordinary paternity leave. I want to encourage fathers to take that leave but the Government clearly believe that eight weeks' notice is enough, so why will they not give eight weeks' notice for ordinary paternity leave as well?
	I have very much welcomed many of the measures in this Bill but I have been disappointed about the Government's intransigence over certain issues as we have gone through our debates. The Government are clearly not listening to organisations such as Working Families, the Equal Opportunities Commission, the National Association of Citizens Advice Bureaux and carers' organisations that are very concerned about the narrow definition of carers, which will particularly affect carers who do not reside with the person they are caring for. This might particularly affect gay people and asylum seekers who are least likely to be closely related to the person for whom they are caring. But that is by the way.
	If the Government are serious about their wish to support families and give them the choice of how they run their family and working lives, then at this very last throw, I am giving the Government one more opportunity to give me some valid reasons why they will not accept these small increases in flexibility for ordinary paternity leave so that more fathers can actually take it. I beg to move.

Baroness Morris of Bolton: My Lords, the amendment moved by the noble Baroness, Lady Walmsley, seeks to make it easier for fathers to take the leave to which they already have an entitlement. I agree wholeheartedly with her comments about the importance of fathers, particularly in those early stages of a baby's life.
	On Report, I said:
	"One of our concerns about the right to existing paternity leave is its rigidity".
	On that occasion, I also said:
	"Legislation should not be so prescriptive that it does not provide flexibility when it is desired and agreed between employers and employees". [Official Report, 25/4/06; col. 126-7.]
	As such, I very much support what the noble Baroness, Lady Walmsley, is trying to achieve. However, I do understand that, given the range of additional entitlements that this Bill already confers on employees, there will be an extra burden on employers. At this late stage, perhaps that is just too much to ask. However, when the Government are consulting and taking all the time commented on by my noble friend Lady Miller, perhaps they will consult on the flexibility of ordinary paternity leave so that where the leave is agreed between employer and employee, there can then be more flexibility in the time taken.

Lord McKenzie of Luton: My Lords, I thank the noble Baroness, Lady Walmsley, for introducing these amendments and acknowledge that they ameliorate those she produced earlier and are based on agreement with the employer. We have listened to all sides in our consultations and discussions, but, obviously, there is not always agreement particularly on the practicalities. Of course we want as many fathers as possible to take up the opportunity available for ordinary paternity leave, but, as the noble Baroness, Lady Morris, indicated, there is a balance to be struck.
	Before turning to the detail of the amendment, it may be helpful to reflect briefly on the way in which paternity leave and pay is working. It is the Government's view that the historic new entitlements introduced three years ago for working fathers have been widely welcomed, are working well and are not presenting significant administrative difficulties to either employers or to new fathers. Three years on, research evidence is helping us to build a clearer picture. The maternity and paternity right and benefits survey of 2005, published earlier this year, contained some encouraging facts. Fathers are now taking more leave around the birth of their child, with the vast majority—93 per cent—taking time off around the time of the birth, and four-fifths of those taking up their entitlement to paternity leave. The survey asked those fathers who did not take advantage of paternity leave and pay why they had not done so. Of the answers given in the survey, none gave as a reason a problem with flexibility or with the notice they had been required to give. In short, the facts do not bear out the argument that large numbers of fathers are being denied their entitlement because of inflexible regulations and administrative arrangements.
	Against this must be weighed the disruption to employers of having to absorb more changes to the rules. These amendments seek to make significant changes to the way the existing right to paternity leave is structured. First, they seek to allow paternity leave to be taken not in whole weeks but in as little as individual days. The current regulations require that paternity leave is taken in weekly blocks—either one week or two consecutive weeks—and we consulted on that structure before it was introduced. It was felt that, on balance, providing employers with clarity and certainty over how the leave would be taken was the approach that best balanced the interests and needs of both employees and the businesses that employed them. At the time, there was some concern among employers that allowing the leave to be taken in smaller, separate units could prove administratively complicated. I appreciate that the noble Baroness's amendment would allow such flexibility only by agreement between employer and employee.
	I accept that some employers might see some attractions in being able to arrange fathers' leave this way. However, we would need to consider carefully whether, even with this caveat, pressure to allow greater flexibility might grow on many employers who did not see a business case for changing the existing system. The Government are always happy to listen and we have certainly not ruled out looking again at flexibility. But the principles of better regulation demand that we would be very sure that a good case exists for introducing further changes to employment law and that the implications have been properly thought through. I am not convinced that such a case has been made.
	I must add that accepting this change would also require a consequential amendment to the primary paternity pay legislation. Statutory paternity pay is a weekly payment made in respect of a period of one or two weeks. To make the change proposed would mean that anyone taking their leave in anything other than weekly blocks would be left without an entitlement to pay for that leave. That is a significant technical issue.
	I turn now to the time during which the paternity leave may be taken. I will repeat the arguments that I advanced at Report. Arguing that the two weeks' ordinary paternity leave should be taken at a time of the father's choosing, up to a year following the birth, is, I am afraid, to confuse the distinct purposes of ordinary and the proposed additional paternity leave. The entitlement to the current two weeks exists to allow the father time off work to support the mother and care for the child soon after the birth; a time which is highly demanding of both parents and during which the support that the father can provide, both to the mother and to the new child, is very often hugely valuable. We are introducing additional paternity leave for those fathers who wish to take leave later on in the first year of the child's life. The purpose of that additional leave is not the same.
	As I said at Report, our view is that a period of 56 days allows a sensible degree of flexibility for the employee to choose when best to take the leave, while at the same time ensuring that the leave is taken soon after the birth. The amendment would allow those two weeks to be taken anywhere from birth to between six months and a year after the date of birth of the child. We contend that that would place far too great a burden on the employer.
	The third part of the amendment seeks to reduce the amount of notice which an employee must give of their intention to take paternity leave. I do not intend to rehearse again the various good arguments against accepting such an amendment, other than to say that, although I recognise that in laying this amendment the noble Baroness has looked to the proposed notice period for additional paternity leave, the point at which a father must give notice of his entitlement to paternity leave and the expected date of child birth reflects the point at which a mother must give notice of her maternity leave. At this point the mother will be 24 weeks into her pregnancy. There is therefore a point of consistency here, although that is not the only reason for resisting the amendment. The point I made in my opening remarks—that we are not aware that the existing system is preventing fathers taking their leave—holds here.
	Employers are, of course, free to accept a shorter period of notice if they wish and indeed must accept shorter notice if it is not reasonably practicable for the employee to give the notice set out in the regulations. On top of that the employee need give only four weeks' notice of his intention to change his plans. This does not mean, though, as was suggested at Report, that the employer does not benefit from being told before that point that the father intends to take leave. The current regulations give both parties the right balance of flexibility and certainty.
	The work and families package is a balanced one. I believe that the noble Baroness, Lady Morris, recognised that point. Its success lies in that balance: there are measures in the Bill for both employers and employees. For that reason the package has commanded the support of a wide variety of stakeholders, including business. I do not believe that the amendments proposed by the noble Baroness respond to a real problem with the way the current rules work in practice—indeed, as I have said, paternity leave and pay have been a very great success—and for that reason I do not believe that it would be right to ask employers to plan for and adjust to further changes in the overall package of legislation. I hope that the noble Baroness will accept that and that the amendment will be withdrawn.

Baroness Walmsley: My Lords, I thank the Minister for his reply and the noble Baroness, Lady Morris of Bolton, for her comments.
	It seems to me that the Government are putting businesses before families. I do not believe that it would do families any good if businesses were put under undue pressure and were to go to the wall because of it. Families would then be left without jobs and incomes. That would not be a good idea. But given all the evidence of how beneficial flexible working and family friendly policies are to the economic success of businesses, I do not believe that the measure would create an undue burden.
	The Minister and I slightly disagree about the number of fathers who are taking their ordinary paternity leave. He keeps saying that 93 per cent of fathers take time off around the time the baby is born. That is not the same as taking their full two weeks' paid paternity leave to which they are entitled. We know that a lot of them take paid holiday.
	To take the leave in individual days or two or three days here and there might be much more convenient for the employer. I noticed a chink of light in what the Minister said about that. He said that he would look again at that aspect of the flexibility for which I am looking to see whether opinion among businesses might change. That is an invitation to me to keep the pressure on. I noted what the Minister said about consequential amendments, but if the Government had been interested in the amendment, they would have proposed the consequential amendments. I would expect them to do so.
	The need for support for the mother does not diminish after 14 days, and in fact it can be even greater after 14 days, because over the 14 days she has very close attention from health visitors and the medical profession. It is only later that sometimes problems arise, either with breast feeding or coming off breast feeding and going on to other kinds of feeding.
	The Government are being completely unreasonable about the notice period. The mother can give only eight weeks' notice of a change of her return to work, and the father can give only four weeks' notice of a change of his intentions in regard to his ordinary paternity leave. Surely, then, double that amount would allow a business plenty of time to plan and manage that short amount of leave, especially if it was to be taken at times and in day blocks to suit the employer. The Minister and I will not have a meeting of minds on this, and I will not get anywhere because the Conservatives will not support me on it; quite clearly they too are putting business before families, which surprises me very much. I therefore beg leave to withdraw the amendment.

Baroness Miller of Hendon: My Lords, before I speak to the amendment, I say to the noble Baroness, Lady Walmsley, that we do not put business before family. We are very much of the view that a balance must be struck, and we think that the Government have struck a balance.
	This is another amendment that I have been reluctantly compelled to bring back to your Lordships because of a strange reluctance on the part of the Government to commit themselves to the way in which one of the major provisions of the Bill is to be implemented. The Government have decided to award workers in England, Wales and Scotland an extra eight days' paid holiday a year. Those were called bank holidays; the idea was that they should be paid as well. Clearly, the manifesto commitment was simply tagged on to a Bill that was originally intended only to deal with maternity and paternity pay and leave to take advantage of a legislative slot. We are not arguing about that. But as an afterthought, the Government have obviously not yet managed to work out the means of implementing this new policy nor, I suspect, its full financial and commercial implication and costs.
	The Minister conceded:
	"Such a phased introduction would give a longer period for business . . . to adjust to the new arrangements; it would spread any additional cost over a longer period, and the amendment reflects the position of the CBI".—[Official Report, 25/4/06; col. 133.]
	In other words, the Minister thought that it was quite an interesting point of view, and I think he used the words "light touch". So what are the Government doing about bringing this provision for an extra week and a half's paid leave into force in several steps? It will not surprise your Lordships to learn that they are engaging in yet another round of consultation, and after what I have said before I will not make any more of that. I understand that the Government consult; they consult lengthily and they then consult on the consultation and so on, and eventually we get there. I understand all that—although I said that I would not repeat it I am afraid I did; I am guilty.
	If the Government were to bring in two days' leave a year, the whole exercise could be covered within the theoretical life of the present Parliament—two days in one year and two days in another and so on—because businesses feel that six extra days in one go is rather hard. The only question would be—by which two days in which year? That is not a very difficult problem.
	Another aspect of this concerns me. It is the suggestion that was made to me during my conversation with the department on 4 May that, rather than just relate the extra eight days specifically to the bank holidays, which is what I had originally thought and was what it said, the time could be given as a straightforward addition to the existing four weeks' statutory annual leave. I said that we could all understand where that might lead, because the four weeks would immediately become five and a half weeks, and then if the extra eight days were not taken as bank holidays, the employee could either want those days as well, or days off, or extra pay in lieu. When I mentioned that as a concern, I was told during the telephone conversation—and it was confirmed in the note afterwards—that indeed that was a matter of concern and it might happen. So, I understand that the Government felt that I might have a point.
	As consultation continues, I do not know whether the original idea of introducing the eight days' leave gradually instead of in a block to make it easier for businesses to accept or the new idea of not calling them bank holidays and just tagging on eight days will be implemented. The Minister obviously does not know yet because we are still in consultation. If the latter option is taken, given that the Minister was concerned when we spoke about employees also demanding bank holidays, will provision be made to prevent that happening? It would be interesting if he could confirm that to put our minds partially at rest?
	When the Minister responded to my amendment in Grand Committee, he stated that it was difficult, because,
	"it may place an excessive burden on business by changing the rules every year for four years or so".—[Official Report, 9/3/06; col. GC390.]
	I submit that an equal if not greater problem is being placed on businesses by this sword of Damocles hanging over them and the absolute uncertainty about whether the burden of the extra eight days will have to be absorbed all at once and, if not, by how many instalments a year, on which days and when: this year, next year or never?
	Also, in my conversation with the department on 4 May I was told that the Government felt it was necessary to consult with the Low Pay Commission because many of those who will benefit will be on the national minimum wage. I did not comment to the Minister at the time because I wanted to think about it. I cannot see what that has to do with it, because the entitlement is intended to be universal and not means tested. The fattest of fat cats will be entitled along with the poorest of the poor, the neediest or whoever.
	Purely as a result of the desire to consult the Low Pay Commission, the Government told me that the earliest implementation date would be October 2007. That will be almost two years after the Bill was first introduced in the other place. Even then, there is no certainty about the timetable, because in the same conversation I was told—and I quote from the department's note because I did not take one and I wanted to report it accurately:
	"We are also aware of other potential impacts on the timetable; not least the potential for an issue that has not yet been identified to surface during the consultation process and also the impact of some cases currently before the House of Lords that we may need to reflect in the regulations".
	I understand that they may well have to consult on the last bit, but the idea that the Government now expect other identified issues to arise—every minute we find even more things—is a stark admission that this legislation is hasty, premature and not thought through. That is not necessarily a criticism of the Minister's department, but it applies to many other Bills. Given that all these unforeseen things keep cropping up, it is no wonder that the Government want to consult for ever.
	It is grossly unfair to commerce and industry that this uncertainty is being inflicted on them and that it will continue for at least another 18 months with no guarantee that it will be resolved even then. But the Bill will have been passed; that is the issue. It is essential that the Government concentrate on resolving this problem that they have created by introducing the concept of the extra eight days' paid holiday before, by their own admission, they had considered its implications.
	I am offering the Government a lifeline; I always go out of my way to do that for the Minister. In place of the deadline of 31 December 2007 that I offered for a sunset clause on Report, which would have been more than 18 months away, my amendment proposes a new deadline of 31 December 2008—two and a half years from now—for the sunset clause to operate. If the Government cannot get their act together by then, this clause has no place in the statute book, waiting to be imposed on business at some totally unspecified date, possibly with a mere 40 days' notice. The Government have to insert some certainty into this process and, as I said, I want to help them to do it. I have given them a lot of time. The Bill has gone through the other place and today is the last time that we can talk about it in this House. The time that I am proposing is more than generous. I beg to move.

Lord McKenzie of Luton: My Lords, I cannot imagine that, even 20 or 30 years from now, the noble Baroness will not be here fighting hard.
	I apologise to the House for having to table a government amendment at this late stage in the process. It is intended to correct a minor drafting error in Schedule 1, which amends Section 80E of the Employment Rights Act 1996. At paragraph 38, line 32, the Bill reads:
	"The employers on whom duties may be imposed by regulations under section 80AA or 80BB include not only employees exercising rights by virtue of that section and their employers"—
	The correct wording should be the "persons"—
	"on whom duties may be imposed by regulations under section 80AA or 80BB include not only employees exercising rights by virtue of that section and their employers".
	It is clear that this is a minor drafting error, made during the construction of the Bill. Unfortunately, this error has only just been noticed. Therefore, we are tabling an amendment at this late stage. I apologise for that. I beg to move.

Lord Drayson: My Lords, with the leave of the House, I shall repeat a Statement made in another place by my right honourable friend the Defence Secretary. The Statement is as follows:
	"With permission, Mr Speaker, I would like to make a Statement about the tragic crash of the Lynx helicopter in Iraq on Saturday and the immediate aftermath.
	"As the House will be aware, on Saturday, 6 May, at 1350 hours local time, a Lynx Mark 7 helicopter, on a routine flight, came down in Basra city, crash-landing on the roof of an empty building. Five UK personnel on board the aircraft are missing, believed killed: Wing Commander John Coxen, Lieutenant Commander Darren Chapman, Flight Lieutenant Sarah-Jayne Mulvihill, Captain David Dobson, Army Air Corps, and Marine Paul Collins. Their next of kin have now been informed. I am sure that the whole House will join me in sending my deepest condolences to their families and friends. I would also like to express my sympathy to the families of all those who were killed in Iraq over the weekend, including those from coalition forces.
	"I know there is a natural tendency when such awful events occur to speculate about possible causes. I would only caution that such speculation is not only unhelpful but can be very distressing to the loved ones of those involved.
	"As is routinely the case in such circumstances, a detailed technical and Royal Military Police investigation is now under way. The Joint Helicopter Command air accident investigation team is now in place and a full board of inquiry will be conducted. I can, however, confirm that the helicopter was fitted with a defensive aids suite, as are all our helicopters in Iraq.
	"British Army units in Basra deployed immediately to the scene of the crash and secured the area with the help of the Iraqi army and police service. A crowd swiftly formed on the streets surrounding the crash site, and the House will have seen the television coverage of the volatile situation that developed over the next few hours. I am very grateful to the Iraqi authorities for the assistance provided by the Iraqi army and police to bring the situation under control, including the imposition of a curfew by the provincial governor.
	"British troops and Iraqi security forces came under attack with a variety of weapons including stones, gunfire, petrol and blast bombs, rocket-propelled grenades and mortars. It is entirely right that our troops take action to defend themselves in such circumstances. I can confirm that British personnel fired both baton rounds and a limited amount of live ammunition.
	"Seven UK personnel were injured as a result of the disturbance. According to the information I have, none of these injuries was serious. Local reports and our own sources indicate that five Iraqis may have died and approximately 28 were injured during the civil disorder that followed the crash. The full extent of UK military responsibility for any of these casualties will be clarified in due course, following completion of the post-incident review. In circumstances such as these such a review is normal.
	"I know that some commentators have concluded that the television footage we saw on Saturday is evidence that southern Iraq is rising up against the British presence and that we should withdraw all troops immediately. I do not share that assessment, but, more importantly, nor do the commanders on the ground including Major General John Cooper, in Basra.
	"To put this in its proper context, the disturbances on the ground involved a crowd of 200 to 300 people. Although magnified by the media images we saw, it was an isolated incident in a city of around 1.5 million people. Crucially, it was brought under control by the Iraqi security forces themselves in a matter of a few hours. Since then, the city has remained calm. That is testament to the commitment and bravery of the Iraqi personnel and to the work we and other members of the coalition have been doing to train the Iraqis to prepare them for taking on responsibility for the security of their own country—a country where over 12 million Iraqis showed courage in voting for a new government.
	"The House will be aware that relationships with the Basra provincial council have been difficult over the past eight months or so. Yesterday, the governor of Basra announced a return to full co-operation and dialogue between the council and British forces. Members of the council expressed their profound regret for the incident and extended their condolences to the families. This reinforces our belief that the vast majority of the people of Basra want to work with us to develop governance and security in the region. That is not to say we should be complacent; far from it. The crowd on Saturday would appear to have included elements that were armed with mortars and rocket-propelled grenades and were prepared to use them against British forces. Major General Cooper has confirmed that he is content with the numbers and capability of the troops at his disposal, but I can assure the House that we keep force levels under constant review.
	"I am also aware that some have called for the Government to set out our exit strategy from Iraq. That exit strategy has been set out before the House many times, most recently on 13 March by my predecessor the right honourable Member for Airdrie and Shotts. But let me be clear: we are still committed to remaining in Iraq as long as we are needed, the Iraqi Government want us to stay, and until the job is done. That job is to assist the Iraqi Government and their security forces to build their capabilities—military and civilian—so that they can take on full responsibility for the security of their own country. Achieving this objective is the exit strategy—nothing more, nothing less.
	"Multinational forces continue to train and mentor the Iraqis in order to develop operating effectiveness. Currently there are more than 250,000 Iraqis in their security forces, including about 115,000 in the Iraqi army. This was a serious incident, but despite that we can draw some encouragement from the fact that local forces worked with us to restore order on Saturday.
	"I will conclude by expressing again my deepest condolences and sympathy to the families of those killed on Saturday and to the colleagues they leave behind in the Royal Navy and Royal Marines, the Army and the Royal Air Force, particularly those who continue to serve with such bravery to help the people of Iraq build a secure and stable future for themselves".
	My Lords, that concludes the Statement.

Lord Craig of Radley: My Lords, I thank the Minister for repeating the Statement and I share in the sense of sorrow and sympathy for the families of those whose lives have been lost. I was glad to hear the assurance given in the Statement that the situation in Basra is not just as we saw it on our television screens the other night, but that it is reasonable, with a good degree of co-operation with the governor. That underlines strongly the efforts being made by our own forces and the coalition forces to build up relations in that part of Iraq.
	However, there have been a number of reports in the press of inadequacies, such as body armour not being available and that a Hercules aircraft unhappily shot down had not been provided with the right protection against a fire outbreak in its fuel tanks. Indeed, on that occasion, before the full board of inquiry conclusions came out, one was led to believe that adequate protection had been provided. The Minister has just suggested to noble Lords adequate protection is in place for our Lynx helicopters. I hope very much that when the board of inquiry reports, that will indeed prove to have been the case in this instance. More generally, does the Minister agree that when our forces face hazardous operations, there can be no excuse whatever for any penny-pinching or short-changing on the essential protective measures and equipment with which they should be provided?

Lord Drayson: My Lords, my noble friend is right. We are pleased to see the statements that have been made but they need to be backed up with full action with regard to the day-to-day challenges faced by our forces face and by the Iraqi security forces themselves. This needs to take place in the way in which operations are undertaken and the way in which the development of training is progressed. We are pleased that more than 250,000 Iraqi security forces personnel have now been trained. However, their capability, and the speed at which they are able to take over full responsibility for the security of their own country such that we can progress handover, is very important. We need to see these positive words translated into action on the ground.

Moved accordingly, and, on Question, Motion agreed to.
	House in Committee accordingly.
	[The DEPUTY CHAIRMAN OF COMMITTEES (Baroness Gould of Potternewton) in the Chair.]
	Clause 1 [Preparations for restoration of devolved government]:

Baroness Harris of Richmond: I wish to speak to Amendments Nos. 3 and 4. As I understand it, and following what the noble Lord, Lord Maginnis of Drumglass, has just said, the d'Hondt mechanism for choosing Ministers depends on a party's numbers. Numbers have never been my great forte so I find that system difficult to understand. But as I understand it, if d'Hondt was run using the strength of the parties as they were in 2003, as the noble Lord, Lord Maginnis, said, the Executive would comprise three DUP members, three UUP, two Sinn Fein and two SDLP.
	However, if it was run using the strength of the parties as they are now, the Executive would comprise four DUP members, two Sinn Fein, two UUP and two SDLP. So as well as losing a seat on the Executive to the DUP, the UUP would be further disadvantaged as it would be further down the pecking order for choosing ministries. Although the UUP now has the same number of seats as Sinn Fein, Sinn Fein gained more first preferences during the election in 2003. When parties are tied under d'Hondt, the party with the biggest number of first preferences is deemed to be the larger. I see that the noble Lord, Lord Maginnis, agrees with my interpretation of that. So instead of choosing the second ministerial position, the UUP would pick up the third, after the DUP and Sinn Fein. No wonder this needs to be clarified. I am sure that the Minister will look closely at what I have said and perhaps write before we reach the next stage of the Bill to confirm whether my interpretation is right.
	It could be argued that a precedent was set during the course of the 1998 Assembly because, initially, Robert McCartney's part of the UKUP was elected with five members of the Assembly. However, during the course of the lifetime of that Assembly, the four other members split away from McCartney and formed the NIUP. But that did not affect how the Executive or committees were constituted as it was decided that for the purposes of d'Hondt you were a member of whichever party you were in when you signed the roll on the first day. If that logic was applied to this situation, as the Assembly has not sat since it was elected in 2003, parties would be signing the roll in May and, therefore, would sign in as a member of whichever party they belong to now. I hope that the Minister has followed what I have said.
	This situation demonstrates that the d'Hondt mechanism is not a particularly good way in which to allocate seats in an executive. D'Hondt also throws together parties that may not want to work together. As the 1998 Assembly demonstrated, there was absolutely no sense of collective responsibility in the Executive; Ministers simply did their own thing. It would be much simpler all round if there was a voluntary coalition. Under those circumstances, parties would at least have come together by choice, they could negotiate a programme for government together, and we could achieve some kind of cohesion in the governance of Northern Ireland.

Lord Glentoran: I have very few words on this. First, the noble Lord, Lord Laird, has aired his amendment many times here, and if it was going to be helpful to include it in the paragraph that his amendment recommends, I would agree with it. Generally, we were very concerned at the breadth and the Henry VIII-type clauses that were included in the Bill. As noble Lords will know, the Constitution Committee under the noble Lord, Lord Holme of Cheltenham, raised this matter, and I was pleased to read the Government's response this morning. It has been well raised and well recorded in Hansard, and on this occasion I will put my faith in the Government not usurping their powers in the next period of the Bill.

Lord Rooker: We would never dream of usurping our powers, which are incredibly circumscribed and much more limited than they might appear at first sight. I am grateful to those noble Lords who have spoken and I believe that I can answer to satisfaction all the points that have been raised.
	The Assembly's key task—the Assembly that is starting on Monday 15 May—will be to elect a First Minister and a Deputy First Minister and then ensure that the remaining ministerial portfolios are filled on restoration. Clause 1 empowers the Secretary of State to refer other matters to the Assembly that he considers appropriate, and he has said that he is willing in principle, in the light of consultation with the parties, to refer matters that will feature prominently on the agenda of a devolved Assembly and Administration in Northern Ireland. We are quite flexible about that.
	Through Amendment No. 1, the noble Lord, Lord Laird, is seeking to ensure that the Secretary of State may refer to the Assembly matters relating to the north/south implementation bodies, as defined in Section 55(3) of the 1998 Act. The noble Lord's views on the north/south bodies are well known, and I have been made well aware of them in the 12 months that I have been responsible for answering for the Northern Ireland Office in your Lordships' House. The noble Lord has had an opportunity to ventilate those views again today.
	As I have said, the subjects that will be referred to the Assembly will be a matter for consultation with the parties. That is important. I am not therefore in a position to give guarantees that the issues raised by the noble Lord will be referred to the Assembly, but I will ensure that the Secretary of State is aware of his comments in the debate. I think that we would both agree that the best way of ensuring the full accountability of the north/south bodies—I agree with him that they need to be fully accountable—is to restore a fully-functioning devolved Assembly. That is by far the best way—moreover, that can come pretty quickly. We will not stand in its way. We know we have the November deadline, but if Members of the Assembly want to get back before the end of this month, there will be no problem. Indeed, we will do everything we can to facilitate a fully functioning devolved Assembly.
	However, the noble Lord's amendment seeks to confer on the Secretary of State a power which Clause 1 already gives him. That is the point—the Secretary of State can do that because he can refer to the Assembly "such other matters" as he thinks fit. That drafting would, as it stands, allow him to refer to the Assembly the sorts of matters that the noble Lord raised. Therefore, we see no need for the amendment. We are quite flexible about this. We want the Assembly to discuss matters over the summer; but the best way to achieve the accountability of those bodies is to have a fully functioning devolved Assembly.
	The noble Lord, Lord Smith of Clifton, and the noble Baroness, Lady Harris, through Amendment No. 2, would appear to seek to remove the Secretary of State's power to make directions in relation to the operation of the Assembly under the Bill. Paragraph 4 is designed to permit the Secretary of State, among other things, to set the standing orders for the Assembly. As I acknowledged at Second Reading last Tuesday, the Secretary of State's powers in this area do at first appear to be broad. The Delegated Powers and Regulatory Reform Committee has understandably and rightly drawn your Lordships' attention to them, though not with any suggestion that they were unjustified in the context. That is what we must be mindful of—the context of this Bill is time-limited.
	Those powers might well be questionable if they related to the Assembly under devolution, but they are necessary, in the present, very special, context. Next Monday, the Assembly has the essential function of selecting the Executive and otherwise preparing for restored devolution. It does not make sense to require the Assembly first to deal with distractions beyond that, such as determining complex sets of standing orders. That would muddy the waters. There are wide divergences of opinion among the parties at present and it is almost an invitation for them to become bogged down in this issue by taking their mind of the main purpose of what the Assembly is returning for—especially since voting on standing orders, under the 1998 Act, requires cross-community support.
	We not believe that there is a great groundswell of opinion among the parties suggesting that this issue be left to them. But, crucially, as soon as the devolved Assembly comes back—and that could be by the end of this month if the parties were so minded; they do not have to wait until the autumn—it will have back its old standing orders and it will be master of them. That will not require anything from the Secretary of State. That is the key issue. Given that they are meeting for a specific purpose, it would not suit anyone for Members of the Assembly to get bogged down in standing orders now. That is not the main thrust of the Bill.
	As I said last week, we have published drafts of the standing orders that we propose to make and they have been placed in the Library and the Printed Paper Office. They reflect as far as possible the standing orders of the Assembly before its suspension in October 2002. We have received representations from the parties about them and I understand that work on them was carried out quite late over the weekend as things came into the office in the darker hours of the day. We have taken note of the points made in both Houses of Parliament and we will produce a revised version of the standing orders later this week. I hope that it will be available by the middle of the week but I cannot specify whether it will be ready on Wednesday or Thursday. However, there is no reason for us to delay.
	The point is that we stand ready to make further amendments if that becomes necessary in the days and weeks ahead, again taking account of party views. So, when we publish the standing orders later this week, it is not the case that that will be it for this Assembly all the way through to November. We can amend the orders and we will discuss that with the parties as and when necessary.
	I hope that Members of the Committee are reassured that, although the powers that we seek are substantial, they are what the situation demands. They are only for this specific situation and not for the future running of a fully functioning devolved Assembly. As I said, they are temporary, like the rest of the Bill. After 24 November, or earlier if we are lucky and the move to devolution is quicker, they will be a matter of history because the Assembly will be master of its own standing orders.
	I always hate having to use these arguments but, when you are in opposition and drafting amendments, you cannot always take account of everything that you need to do. However, the amendment would leave the Bill silent on where the Assembly's rules and procedures should come from, and the Assembly would not have any authority under the Bill to determine its own standing orders because it is not the fully functioning devolved Assembly. So there could be a difficulty as it could lead to a chaotic situation in which the Assembly could achieve nothing at all. I appreciate that no one in the Committee wants that.
	One area where we intend to make a minor change to the standing orders is in relation to party strengths regarding nominations under the d'Hondt process, by which Ministers are chosen, apart from the First Minister and Deputy First Minister. Through Amendments Nos. 3 and 4, the noble Lord, Lord Maginnis, has sought to ensure that party strength is assessed either in relation to how things stood at the time of the last election in 2003 or on the date that the d'Hondt procedure is run. I am grateful to the noble Lord for raising this issue at Second Reading—I do not think that it was referred to during the passage of the Bill in the other place.
	As noble Lords will understand better than I do, the Northern Ireland Act 1998 provides for party strengths to be assessed, for d'Hondt purposes, on the first day that the devolved Assembly meets. That is necessarily very close to the date that d'Hondt is run because standing orders for the devolved Assembly require it to happen within seven days. Our draft standing orders stayed in line with the 1998 Act by setting party strengths at day-one levels, but, under the arrangement that we plan, d'Hondt would not run until after a successful election had taken place for the First Minister and Deputy First Minister. We hope that that will come early in the life of the Assembly but it could come later. So, on reflection, we think it would be more faithful to the devolved arrangements to amend the draft standing orders—that is, the draft standing orders published last week, which will be revised this week—to ensure that party strength will be assessed on the date that d'Hondt is run. You cannot get more up to date than that and it allows for some of the things that the noble Lord, Lord Maginnis, mentioned at Second Reading last week to take place.
	I hope that that satisfies the noble Lord as it meets the central point of his argument. Things have changed in some ways since the elections to the Assembly, which were held some time ago. Although I do not know all the details, I understand that party strengths have varied. I hope that I have satisfied noble Lords about the fact that powers given to the Secretary of State are very circumscribed by the legislation because they can be used only in the context of this legislation, which is time-limited anyway. We are working for success; we are not working for 50:50 or ifs and buts. Success means getting a fully devolved Assembly back before the deadline date of 24 November. The sooner Members of the Assembly are back the sooner they can be in charge of implementing that reform and the principles of it.
	We will not stand in their way. We will not drag things out to September or October to suit our circumstances. If they want to be back by the end of this month or during June to sit before the Summer Recess, Ministers will facilitate that. That is what the Bill is about. That is the measure of success from our point of view—not failure. That is meant in the most goodwill spirit that I can summon for the elected representatives of Northern Ireland to get to do the job. Most people who are elected want to pull the levers of power, and we want everybody in the Assembly to share that view.
	I hope that I have been able to satisfy noble Lords on this group of amendments.

Baroness Harris of Richmond: moved Amendment No. *5:
	Page 5, line 20, at end insert—
	"Assembly control of Orders in Council
	7 For paragraph 2 of the Schedule to the 2000 Act substitute—
	"Parliamentary and Assembly control of Orders in Council
	2 (1) Except where sub-paragraph (2) applies, an Order in Council may not be made under paragraph 1(1) unless each of the following conditions is met—
	(a) condition 1 is that a draft of the Order has been referred under section 1(1) of the Northern Ireland Act 2006 to the Assembly;
	(b) condition 2 is that a meeting of the Assembly has taken place at which it has had the opportunity to consider the draft of the Order;
	(c) condition 3 is that the Assembly at that meeting has not expressed by resolution passed with cross-community support its opposition to the draft of the Order;
	(d) condition 4 is that the draft of the Order has been approved by resolution of each House of Parliament.
	(2) This sub-paragraph applies where the Order declares that the Secretary of State has advised Her Majesty that because of the urgency of the matter it is necessary to make the Order without meeting any of the conditions in sub-paragraph (1).
	(3) Where an Order contains a declaration under sub-paragraph (2) it—
	(a) must be laid before Parliament after being made; and
	(b) ceases to have effect if it is not approved by a resolution of each House of Parliament before the end of the relevant period.
	(4) Where an Order contains a declaration under sub-paragraph (2) it—
	(a) must be referred to the Assembly under section 1(1) of the Northern Ireland Act 2006 after being made; and
	(b) ceases to have effect if before the end of the relevant period—
	(i) the Assembly has not had an opportunity to consider the Order; or
	(ii) the Assembly has passed a resolution with cross community support expressing its opposition to the Order.
	(5) But sub-paragraphs (3)(b) and (4)(b) do not prejudice—
	(a) anything done under the Order before it ceased to have effect; or
	(b) the making of a new Order.
	(6) In this paragraph—
	"the Assembly" means the Assembly referred to in paragraph 1 of Schedule 1 to the Northern Ireland Act 2006;
	"the relevant period" means the period of 40 days beginning with the date on which the Order is made.""

Baroness Harris of Richmond: When the Bill was discussed in another place, it attracted support from all the Opposition parties, including all the Northern Ireland parties represented on the Committee. Clause 1(1)(c) allows the Secretary of State to refer such other matters as he thinks fit to the interim Assembly. Paragraph 8 of the joint statement made on 6 April by the Prime Minister and the Taoiseach states that:
	"It would of course also be open to the Assembly to prepare for Government by considering issues which the Executive will have to deal with, such as future economic strategy, water rates, public administration and education. Ministers would naturally take account of views which command cross-community support within the Assembly."
	This amendment essentially gives effect to that statement.
	It is difficult for people to put much weight on such verbal assurances from the Government because they have consistently failed to respect the will of the parties as clearly expressed on a cross-community basis outside the Assembly during suspension. For example, when the Northern Ireland Grand Committee of another place discussed the order introducing top-up fees to Northern Ireland universities, the Government lost a vote on the order by one vote. Yet top-up fees in Northern Ireland were simply pushed through by Ministers in Westminster. How are we to believe that the Government will respect the views of Assembly Members in the interim Assembly? That is what we are seeking to test by this amendment.
	The amendment would allow the interim Assembly, on a temporary basis, to veto Orders in Council. The veto would not be in the hands of one party or another, or in those of one section of the community. It would not only have to command the support of the majority of Members of the Assembly, but also the support of the majority of the designated unionists and designated nationalists in the Assembly. It would also give the Members of the Assembly an incentive to come together and work on the bread and butter issues for which the Assembly will eventually have to take responsibility. If the clear and overwhelming view of the Assembly on such matters has no binding impact on what the Government do, it is difficult to see how Assembly Members will be motivated to work. Further, as this is a temporary power, as we have already heard, the veto would lapse on 25 November if no Executive is formed. Surely, it would concentrate the minds of Assembly Members to come to an agreement if they knew that they would not retain the ability to have an impact on Northern Ireland policy if they did not form an Executive. These Benches believe that another advantage of this amendment is that it would give Members of this House and another place a clear indication of what the Assembly thinks about the policies that we debate here.
	We have said on many occasions that the scrutiny of Orders in Council is seriously inadequate. In autumn last year, the Secretary of State wrote to our colleague in another place, the honourable Member for Montgomeryshire, asking for suggestions on how the scrutiny of Orders in Council could be improved. We responded on 2 November with a number of ideas on how to bring the views of the political parties in Northern Ireland to the attention of both Houses of Parliament adequately. My honourable colleague in another place received a response from the Secretary of State on 25 March, almost five months after our suggestions were sent to the NIO. It states:
	"Thank you for your letter of 2 November setting out your suggestions for increasing parliamentary scrutiny of Northern Ireland business. I apologise for the long delay in sending you this further reply.
	"I fully agree that the current arrangements are not ideal particularly during Direct Rule. So, I welcome your constructive suggestions.
	"As you know I have made it clear that we have to make progress towards devolution during 2006 and that the scheduled elections cannot take place in May 2007 if the Assembly is not restored. I remain hopeful of making the progress that will pave the way to restoration, which in turn would clearly change the terms of the discussion about making significant changes to the way in which we legislate for Northern Ireland at Westminster.
	"I expect an announcement by the two Prime Ministers shortly, on which I will of course brief you in detail nearer the time.
	"I will review the situation again later this year when we should have a clearer idea as to the chances of success. If there appears to be little prospect for a successful restoration of the devolved institutions at that juncture, I will want to talk to you and the other parties to discuss the necessary changes".
	In other words, in the event of the Assembly not forming an executive in November, a year will have passed since we made our suggestions before any action will be taken to even consider what we put forward.
	We cannot go on like this. We cannot keep legislating for Northern Ireland by the Order in Council process. It is totally ineffective. The amendment we move today will at least improve the scrutiny of those orders on a temporary basis. I beg to move.

Lord Tebbit: I have to confess that I am not one of the most optimistic people as regards what will happen after this Bill is enacted. There are still some very grave doubts about the sincerity of some of the politicians involved, particularly their attachment to the process of law and order, and their commitment to law and order in the Province. With that in mind, we must accept that there is at least a possibility that the legislation will not be successful in getting devolved government up and running again, therefore I have a great deal of sympathy with the amendment. It would set a precedent, not really for this interim period—frankly, I do not think that is worth doing; it is just muddying the waters—but if this collapses and we have to go back in the long term for direct government, we would have much better ideas about how to handle the procedures for it than at the moment.
	I hope that the noble Lord, Lord Rooker, replies, will express his sympathy, at the very least, for what is intended here: improving how these matters are handled during the period of direct rule, whether it be short or long.

Lord Maginnis of Drumglass: I add a few words to those spoken with very good sense and great understanding by the noble Baroness, Lady Park. I have considerable sympathy with this amendment in that, however robust the Minister intends to be about moving matters forward, it would be absolute and utter folly to attempt to make major legislative changes during the six-month period when what we call the Assembly—not the real Assembly but the Assembly Members negotiating with each other—is functioning. I hope that the Minister, when he responds to the noble Baroness, Lady Harris, will consider the intention of the amendment and assure us that, however robust he and his colleagues may be in the Northern Ireland Office, they will not in that interim six-month period seek to override the intention of those Members of the legislative assembly meeting to negotiate a way forward.

Lord Rooker: I accept the invitation of the noble Lord, Lord Tebbit, to express sympathy with the principle behind the amendment. The Government's view is that the present situation is unsatisfactory for scrutinising Northern Ireland legislation. On two occasions in the past 12 months we have talked with the other parties to see what ideas we could develop on better quality scrutiny of the legislation in both Houses. Discussions have gone on in both Houses. We have not come up with lots of new solutions, and I accept that the present situation is not satisfactory, but the situation in Northern Ireland is not satisfactory either. That is the point we have got to.
	The Assembly's position for the next few months is unique and time limited. I can see the seductiveness of the moves behind the amendment, but in reality it is not practical. We are operating with good faith, as the Secretary of State has said, in terms of referring matters to the Assembly—water charging, the review of public administration, the in education or other matters. What we cannot and will not do during this period—it may not be six months; it could be six weeks—is abdicate our responsibility for governing. If this amendment were accepted, we would be faced with a very difficult situation because it would provide in effect—and I think that the noble Baroness used the words—a power of veto over the legislation before it comes to Parliament. It may not just be over the legislation; there are other changes under way.
	As I said on a previous amendment, the motivation is there for the Assembly to get back to taking decisions on behalf of the people of Northern Ireland. We will not delay that a day longer than necessary. It is very seductive. We have heard the voices asking us to take the Assembly seriously on contentious devolved issues; and we want to take account of them. For the past 12 months we have discussed different issues and had briefings; I have taken part in some. But we would be wrong if we did not listen, given that devolution may be only a matter of months away. So it would be quite wrong if we were not taking matters seriously. But there is a big difference between that and giving formal powers to an institution that does not have government responsibilities.
	Some of those decisions have financial consequences. The budget has been set for this year and next year. If there are any reductions in charges on certain sections of society, there will have to be increased charges on others. The Assembly could vote on the one but not have responsibility for the other. That would leave us in an incredibly difficult position. The answer to that is that the Assembly can have all the powers to take decisions to cut charges, raise taxes and make the consequential financial changes as soon as it is back. As I have said repeatedly, we will not stand in its way.
	We are accountable for the good governance of Northern Ireland and we are accountable to this House and the other place. We cannot be obliged to follow the will of another body. We as a government could not come to your Lordships' House or the other place to ask those bodies, one elected, one appointed, to follow the will of another body that has no responsibility but some power that we have given it. That simply would not work.
	It is true that we need to take account of things. I do not want to goad people, but we are quite clear that there is a massive reform programme under way in Northern Ireland, much of it started by the Assembly when it was fully devolved. We did not initiate a lot of that; a lot of it was started by the Assembly.
	Processes are under way that have major financial consequences for the budget starting next year: the second year of this two-year budget. Water charging is one example. There is the new rating system—which I take the opportunity to say is not a test-bed experiment for England; it is suited to the 700,000 dwellings in Northern Ireland. That is what it has been carved out for. Taking any changes that the Assembly might want to make and any of the orders that may be required in the meantime could have massive financial complications for the budget—tens of millions of pounds—yet it would not have responsibility for taking the decisions to find the money.
	We must be serious about that. We are not standing in the way of the Assembly taking all the decisions. That is the point. We are not standing in its way. It can start this month or next month to take all the decisions. It is not fair or mature to put in its hands the power to take some decisions but not the consequential decisions. It would be quite impossible for me and other Ministers to come to this place to try to pick up the financial consequences of a situation that was not of our making and under no control. I am not saying that the Assembly would be irresponsible, but if we confer the power of veto on a body that does not have full responsibility for taking account of the consequences of its decisions, we are asking for trouble.
	We want to do what we can to listen to what the Assembly has to say. As I said at Second Reading on the point raised by the noble Baroness, Lady Park of Monmouth, on education, the order has been tabled. It will be debated: I think that it is programmed for later this month or very early next month. There will be a full debate on it. If we delay that order, that throws into considerable confusion part of the education system in Northern Ireland and puts it back for a year. It is not just a question of delaying it for a few months; we are talking about a year.
	We fully accept the points made by the noble Lord, Lord Tebbit. As I said, another Bill, the Northern Ireland (Miscellaneous Provisions) Bill, will come our way, on which we can have a full debate on the issues that would be devolved in future where the conditions are right. So there will be opportunities for this House to debate those matters in some detail.
	We want the Assembly to be back as quickly as possible. It can then pass the legislation that it wants and sort out the consequences of its decisions. That is very important. We want the Assembly to have mature, responsible elected representatives. They are more likely to be that way and restore the confidence of the people of Northern Ireland if they are seen to be accountable for their decisions as politicians. Those decisions might, on the one hand, be popular; but, on the other hand, they must take the consequential decisions that result in cuts or delays in programmes and face the electorate for that. They are then more likely to make good decisions.
	I am not saying that they should not make those decisions or change what the direct rule Ministers have done. I am not saying that at all. When the Assembly has its devolved powers back, it will be in charge of those matters. It can, using its own procedures and voting system, make those bold decisions, take charge of the implementation of the reform programme and speed it up, if it likes, or slow some of it down, but it will be responsible for all the decisions that flow from that.
	That is why we cannot agree to the power of veto. That is power without responsibility. We want the Assembly to be responsible and, as a responsible Government, we want to take account of what it says on the matters that we want it to discuss in the short period for which it will have temporary status. We will genuinely see how we can accommodate the views that come to us on a cross-party basis. We will do that in a spirit of using our best endeavours, but we cannot give the temporary Assembly veto powers, because it does not have responsibility for those actions. That must rest with Ministers accountable to this House and the other place.
	I have tried to respond in the least negative way that I can, but the answer is, "No, resist" for those reasons. I understand and sympathise with what is behind the amendment. The scrutiny system is unsatisfactory. If, as the noble Lord, Lord Tebbit, indicates, there is a failure—we are going for success—my view, and I think it is the view of other Ministers, is that if there is no return of the Assembly, there will have to be a different arrangement for direct rule for the foreseeable future from the one we have had hitherto. If it had been quite clear that the Assembly would not be back in a few months, we would have had to have that before November. There would have to be a completely different system.
	Departments were structured around Ministers—departments were designed for Ministers rather than Ministers designed for departments. We would have to change that system of having duplicate, sometimes overlapping responsibilities. For example, there were three departments dealing with education. There were 11 departments to suit the 11 Ministers. We would consider other changes in direct rule and then consider the consequences for the scrutiny in this place and the other place. So it would not be, "Carry on as she goes": the status quo of direct rule as in the past three years. I do not think that that would be a reasonable proposition. That is not said as a threat. It is not meant as bullying; that is just a practical consequence of ensuring that we have better government for Northern Ireland than we have been able to achieve with the scrutiny system that we have at present.

Viscount Allenby of Megiddo: I will first call the Minister to move Amendment No. 1. I will then call Amendments Nos. 2 to 17, which are amendments to Amendment No. 1. Proceedings on each amendment will be concluded before we move on to the next amendment. Amendments Nos. 2 to 17 have been dealt with. I will then put the question on Amendment No. 1.

Lord Falconer of Thoroton: I move Amendment No. 1 on behalf of the noble Baroness, Lady Ashton of Upholland, and, with the leave of the Committee, I will speak also to the other amendments in the group.
	The amendments fulfil the commitment I gave to the House on 20 March this year that I would table amendments that deal with loans that political parties receive. There are issues related to the funding of political parties that go beyond the treatment of loans, and the review set up by my right honourable friend the Prime Minister and chaired by Sir Hayden Phillips will deal with these. We are tabling these amendments now because there is broad agreement between the political parties and the Electoral Commission as to what should be done. The legislative vehicle, the Electoral Administration Bill, which falls within my responsibilities, gives us the opportunity to make the necessary changes. Moreover, amendments that deal with these issues had already been tabled for discussion in Grand Committee.
	Noble Lords will be aware of the degree of public concern about this issue. The Government have already made a huge contribution to introducing transparency into the affairs of political parties by advancing in 2000 a new regime for the disclosure of donations. Loans on commercial terms were not included. The regime was advanced on the recommendation of the Committee on Standards in Public Life, on which the noble Lord, Lord Goodhart, served. I see he is in his place today. The Government commissioned it to consider the whole issue of the funding of political parties. At that time, loans were not thought to pose any problems. The amendments we now propose take the form of a new Part 4A of, and Schedule 6A to, the Political Parties, Elections and Referendums Act 2000, to which I shall refer from now on as the 2000 Act. As I am sure noble Lords will know, the existing Part 4 of, and Schedule 6 to, the 2000 Act provide a system for the regulation of donations to political parties. That regime requires all donations over £5,000 to a political party to be reported to the Electoral Commission, and ensures that donations can be made only by individuals or organisations with a sufficient connection to the United Kingdom.
	These requirements have been widely acknowledged to have brought transparency and openness to the making of donations to parties. That is why we have chosen the same regime as a template for the current amendments dealing with loans. Indeed, the new provisions deviate from the requirements for donations only where it has been necessary to reflect the different nature of a loan from a donation. I am sure that noble Lords will agree that it makes sense to build on the success of the existing donations regime in trying to achieve the same level of openness in loans to parties.
	Before I come to the more detailed aspects of the regime as set out in the new sections and schedule, I think it would be useful to remind the Committee of the four main features proposed. First, the reporting requirement is triggered when a loan of over £5,000 is made. Such loans, whether made on commercial or less than commercial terms, will have to be reported to the Electoral Commission. This will be at quarterly intervals, or weekly during a general election period. Secondly, all loans extant on the day that the new provisions come into force, and any taken out thereafter, would have to be disclosed. Thirdly, a party would be permitted to take out a loan only from the same sources from which it is permitted to receive donations, although existing loans will not be subject to that permissibility requirement. Fourthly, the regime would cover not only loans, but all credit facilities and the provision by third parties of guarantees and securities.
	As our thoughts have developed on how best to provide reassurance that the funding of political parties will in future be a matter of record, I have looked to representatives of other main parties for support, which I have received. On 20 March, I wrote to all the parties represented at Westminster, and have since held meetings with many of those. Each of them shares my concern that the Government should act quickly, and recognises that a scheme similar to that now well established for donations would be a proportionate response to the need for transparency. I have also taken the views of Sam Younger, chairman of the Electoral Commission, who has welcomed the proposals, and I have spoken to the British Bankers' Association in so far as issues arise about credit and loans from banks.
	I now turn to the detail of the new clause. I am sure that noble Lords will recognise much of this from the donations regime in Part 4 of, and Schedule 6 to, the 2000 Act. First, let us look at the scope of the regime. In all the debate and discussion of the past few weeks, the focus has been on straightforward loans to political parties. However, as we are all aware, there are other ways of giving a financial benefit to a party, apart from giving cash loans or a simple cash donation. There is the giving of credit or the provision of a guarantee or some form of security so that a party can benefit from a loan or some form of property, services or facilities that would otherwise be beyond its credit rating.
	It is important to note what the new regime we propose is and is not intended to do. We do not see a need to create a regime that governs all the significant commercial transactions of a political party, including ordinary contracts for the supply of goods, services and facilities. Money is unique, as a gift or loan of money provides a political party with the flexibility to acquire whatever it may need at a particular time. However, it would not be appropriate for the regime to be confined to simple cash loans. Rather, we also need also to include credit facilities, such as overdrafts. Equally, the giving of guarantees and securities by third parties can confer the same flexibility as a loan of money. Accordingly, the new regime governs this situation as well. Otherwise, a wealthy backer could offer guarantees to all a party's commercial suppliers and enable the party to obtain anything it might need at any given time, even though its credit rating would not normally allow it to do so.
	The definition of "regulated transaction" used in proposed new Section 71F of the amendment therefore captures more than just a loan of money, including, as it does, provision by a person of a credit facility to the party—for example, an overdraft—and provision by a third party of security for any such transaction. The donations regime presently requires loans otherwise than on commercial terms to be treated as donations. However, the comprehensive treatment of loans in the new regime means that it is no longer necessary to draw this distinction. Accordingly, all loans will be dealt with under the loans regime alone, thus avoiding the duplicate reporting requirement.
	I should however point out, as I have said, that trade credit is not included in the definition of a regulated transaction. By trade credit I mean the situation where a supplier permits deferred payment to be made in respect of goods or services. Trade credit does not offer the flexibility of a loan of money. It can be offered only by a person or company that is in a position to supply to a political party the particular goods or services it needs at a particular time. Trade credit is a commonplace feature of commercial transactions, but we have no evidence to suppose that a problem exists with the provision of trade credit. If trade credit were to be provided on less than commercial terms, then that would in any event be captured as a donation to the party. This is because the definition of donation currently includes, and will continue to include, the provision of property, services or facilities otherwise than on commercial terms. That is Section 50(2)(f) of the 2000 Act.
	One of the key issues in deciding whether a regulated transaction has to be disclosed will be its value. Disclosure is not required for loans of £5,000 or under unless the combined lending from the same authorised participant exceeds £5,000 during the course of a reporting year, and the regime does not apply at all to loans of £200 or under. New Section 71G of the 2000 Act specifies that the value of a loan is the total amount to be lent; that is, the interest charged is not included. For a credit facility, the valuation is the maximum amount which may be borrowed under the arrangement. For an arrangement involving any form of security it will be the contingent liability assumed by the person who gives the security.
	New Section 71H in our amendments deals with the important question of permissibility. It will not have escaped the notice of Members of the Committee that some of the concern expressed in recent weeks about loans was based on the suspicion that the lenders were from overseas. I do not suggest for one moment that the loans were not perfectly legal, but none the less we believe, as is the case with donations, that a lender should be either an individual whose name is on the electoral roll or an organisation with a sufficient connection to the United Kingdom. New Section 71H prevents a party entering into a regulated transaction with anyone other than authorised participants, the latter being defined by reference to the existing list of permissible donors in Section 54(2) of the 2000 Act. As I said, that restriction will not apply to regulated transactions entered into before the new provision is commenced. There are issues raised about the extent to which EU law may have an effect on that. I suggest to Members of the Committee that we deal with that under the group of amendments in the names of the noble Lord, Lord Kingsland, and the noble Baroness, Lady Hanham—I think it is the next group—when we will have an opportunity to discuss that important issue.
	The permissibility requirement is buttressed by a battery of criminal offences designed to ensure that where the law has been breached the responsible person is punished. For example, where the party takes out loans with unauthorised participants, the party and its treasurer may commit criminal offences. But I make it clear—again, this is dealt with in a subsequent group of amendments—that these criminal offences are committed only on a "knew" or "ought to have known" basis. If the position is that the party or the treasurer neither knew nor ought to have known that the transaction was with an unauthorised lender, he or the party would not be guilty of a criminal offence. Together with the offences, we have made provision to ensure that where a party has entered into a regulated transaction with an unauthorised participant, it should be required to repay the moneys or benefits it derives from the transaction as soon as that comes to light.
	If the party refuses to repay the loan, a broad power is conferred on the courts, exercisable on application by the Electoral Commission, to restore the parties to the position they would have been in had the transaction not been entered into, to the extent that that is possible. That mirrors a similar provision of the 2000 Act which allows the Electoral Commission to apply to court for the forfeiture of impermissible donations. The same principles apply where a guarantee or security is given by an unauthorised participant, with some necessary adjustments.
	Reporting requirements follow exactly the same structure as the reporting requirements for donations. New Section 71M requires regulated transactions to be reported on a quarterly basis to the Electoral Commission. The requirement to report a regulated transaction is triggered when the value of that transaction exceeds £5,000, either in its own right or taken together with the value of other transactions with the same authorised participant. Thereafter, transactions exceeding £1,000 with the same participant must be reported. Weekly reports are required by new Section 71Q to be submitted in the period immediately before general elections, just as is the case with donations. The Electoral Commission is obliged to maintain a register of regulated transactions so reported, which it is obliged to make available to the public.
	A number of changes are necessary in these amendments to reflect the differences between donations and regulated transactions. Most obviously, the particulars that need to be reported about regulated transactions will be different. Transparency requires that the principal features of the transaction should be required to be reported and disclosed to the public. New Schedule 6A requires the identity of the participants to be reported. It also requires the nature and value of the transaction to be reported, together with details of the rate of interest, if any, to be paid on any sums lent, the length of the loan and other particulars. Provision is made for the particulars to be varied, should it become apparent that transparency requires different or additional matters to be reported about regulated transactions.
	The other major difference which requires a different approach from donations is the continuing nature of a regulated transaction. Because regulated transactions involve an ongoing relationship, it is necessary to require the reporting of variations in the terms of the transaction. That we have done in new Section 71N. Whenever one of the particulars that is required initially to be reported about a regulated transaction is varied, the political party is obliged to record the change in the next transaction report. That is necessary to ensure proper transparency; otherwise, for example, regulated transactions could be varied to permit the making of significant further advances or be put on a zero-interest basis in a way that would not be apparent. We have also imposed a requirement to report when a regulated transaction finally comes to an end.
	As Members of the Committee will have noted, my emphasis throughout in explaining what the new provisions will achieve has been on bringing a fuller openness to the activities of political parties in the use of loans and similar transactions. I believe that the provisions in these amendments set out a very comprehensive regime, benefiting as it does from the precedent of the donations regime. I am sure that we will as a result be able to have a very full debate on the issues and principles of the new regime. However, as with the donations regime, it will be necessary to close any gaps by extending the provisions in much the same manner to individual members of political parties, holders of elective office and members associations where the regulated transaction is—as the 2000 Act provides in respect of donations—entered into for that person's "use or benefit in connection with any of his political activities".
	I propose to bring forward amendments at a later stage which will impose the same regime in relation to regulated transactions as we are today discussing for political parties themselves. It will also be necessary to consider the most appropriate means by which to extend the provisions to Northern Ireland. Amendments will be brought forward for that purpose. I apologise for the time that I have taken to disclose those amendments, but they are complicated, long and important. I beg to move.

Lord Oakeshott of Seagrove Bay: As a non-lawyer, perhaps I may ask the noble Lord, Lord Kingsland, whether he is really serious in proposing this amendment. Are we seriously suggesting that the Conservative Party or other reputable political party would take loans from institutions that are so fly-by-night that they might suddenly close their doors and stop operating in the UK? I advise him to follow the advice of the Lord Chancellor and to stick to the NatWest.

Lord Kingsland: I said in my opening speech on the amendment that I thought that the circumstances in which a registered party would transact with an unauthorised participant ab initio would be extremely rare; but there may be occasions—particularly if the Government consider my European amendment on Report and come to the conclusion that any European bank ought not to be entitled to be an authorised participant—when a bank decides to cease business in London, because, for example, the FSA regime proves too onerous. In those circumstances, a registered party might legitimately be unaware for several weeks, or perhaps even months, that the participant ceased to be authorised. So there are circumstances in which the set of facts that I am confronting make sense. However, I entirely understand both the reasons which the noble and learned Lord gave for being disinclined to accept my amendment and the reasons behind the reasons which he gave for being disinclined to accept my amendment. I shall certainly not press it today, although I shall reconsider it between now and Report.
	I entirely agree with the noble and learned Lord that the most important section of the Bill relating to transactions with unauthorised payments is that which deals with criminal offences. The only reason why I did not table amendments to that section first was that it comes after this section. I certainly do not dispute the Lord Chancellor's judgment about the importance of those provisions. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendments Nos. 6 and 7, as amendments to Amendment No. 1, not moved.]

Lord Kingsland: moved Amendment No. 8:
	Line 132, at end insert—
	"( ) Where interest is rolled up under such a transaction, this does not constitute a new regulated transaction for the purposes of this Part."

Lord Falconer of Thoroton: I understand the concern of the noble Lord, Lord Kingsland. He is concerned with capitalisation—the adding of accrued interest to the total sum outstanding on a loan. He is saying that it would be unduly burdensome to require the capitalisation of interest, which might occur frequently during the lifetime of a loan, to be treated as a separate regulated transaction. I do not think that the regime would require this, but the treatment of capitalisation under the new regime depends on whether the regulated transaction initially provided for capitalisation or roll-over, or on whether the regulated transaction was later varied to provide for it.
	Where the regulated transaction originally provided for capitalisation, the operation of the capitalisation provision would not be treated as the making of a fresh regulated transaction. Rather, the capitalisation provision would amount to a term of the original transaction that would affect its overall value. The difficulty about that approach is in relation to what value one gives to the loan at the beginning, if one of the terms is that unpaid interest can be rolled over or that one is allowed to roll it over.
	Where a regulated transaction which did not originally provide for capitalisation is varied to provide for capitalisation, this change would obviously have to be reported under the continuing reporting requirement in new Section 71N. This is because such a variation provides for the value of the transaction to be increased. The requirement to report changes applies where a variation is made to the particulars that are required to be reported in the original transaction report. A change in the value of a regulated transaction is such a change.
	I can also confirm that where a regulated transaction which existed at the time of the commencement of the new regime provided for capitalisation, such a transaction would be exempt from the permissibility requirements. The operation of the capitalisation provision at a later stage, after the new scheme has commenced, will not bring the pre-existing transaction within the scope of the permissibility requirements.
	I hope that I have reassured the noble Lord, Lord Kingsland, that the operation of a capitalisation provision will not, therefore, give rise to a fresh regulated transaction. However, his amendment has helpfully raised the question of whether agreements for capitalisation give rise to difficulties in valuation. A capitalisation provision will mean that the overall value of the total amount to be lent at the outset will, to a limited extent, be unclear.
	Although the initial capital to be lent will be readily ascertainable, the amount that may be added will depend on how the capitalisation provision is in fact operated during the lifetime of the loan. So, for example, the agreement may provide that interest will only be capitalised if it is not paid within 30 days of accrual, but that if a party always pays the interest within the 30-day limit no sums will be capitalised during the lifetime of the loan. The value that it adds to the transaction will accordingly be variable. This will not be a problem where the initial capital extended clearly exceeds the reporting threshold of £5,000. Whatever the true value of the loan, it is clearly one which must be reported but it could conceivably give rise to difficulties in a narrow category of cases where, say, a loan for £4,000 provides for capitalisation. It is not right that there should be a doubt about whether this is a transaction that is required to be reported. In the light of the amendment, we need to consider how to deal with the capitalisation issue. We will either end up with a difficulty of valuation, which satisfies the point made by the noble Lord, Lord Kingsland, on the need for not too many transactions to be disclosed but does not deal with the difficulty of valuing the transaction, or we do not satisfy the noble Lord, Lord Goodhart, because he would like all the transactions to be disclosed. We need to take that one away and think about it a bit more.

Lord Goodhart: Perhaps I may ask the noble and learned Lord, Lord Falconer, to consider one issue. I can understand that where the borrower has a right under the agreement to have the interest rolled up, one can regard that—to start with, at any rate—as one of the terms of the original loan agreement. On the other hand, if there is no such right and the lender and borrower agree a couple of years later that some interest should be capitalised, I would have thought that that is plainly a new agreement.
	There is a possible intermediate situation: where the borrower has a right to have the interest capitalised but the lender also has a right to call in the loan on, let us say, one month's notice. In that case, it could certainly well be argued, and probably correctly, that by not calling in the loan itself, but allowing it to be carried over and the interest to continue to be rolled up, the lender was in fact extending additional credit to the borrower at that date, simply by not calling in the loan.

Lord Kingsland: We now come to the criminal offences to which the noble and learned Lord, Lord Falconer, referred in response to an earlier amendment. I am looking particularly in my amendments at new section 71L(12) and (13), which deals with the state of mind of a party treasurer in relation to an issue which your Lordships have been discussing earlier: an authorised participant. The crucial words in the noble and learned Lord's amendment are,
	"knew or ought reasonably to have known".
	In tabling my amendments, I might have simply sought to strike out the expression "ought reasonably to have known" because we are dealing with a criminal offence and the normal rule is that there has to be subjective knowledge before proof of mens rea. "Ought reasonably to have known" clearly falls within the category of negligence and therefore, as a matter of principle, ought to have no place in the criminal provisions of the statute.
	However, I have adopted the different approach of using the expression contained in the amendments. Although the regulations have not been made, as I understand it, the character of the registered party depends entirely on the structure of the political party. There may be one treasurer for all activities of the party, which include not only what happens at the centre but also on the periphery. Or there may be a large number of treasurers, many of whom are doing the work voluntarily and part time. It is important, therefore, to take account of the level of knowledge and the degree of professionalism that a treasurer might have in relation to transactions with authorised persons. It is with that very much in mind that these amendments are tabled. I beg to move.

Lord Goodhart: I have to confess that I am a little puzzled by the amendment tabled by the noble Lord, Lord Kingsland. If a person takes all reasonable steps to ascertain the matters mentioned in subsection (2) and has not ascertained them, then that person cannot be said to be somebody who ought reasonably to have known of the matters mentioned in paragraph (b). But the distinction here is that under new section 71L(2)(c) the burden of proof is on the prosecution. The prosecution has to prove beyond reasonable doubt that the person ought reasonably to have known of the relevant matters, whereas under the noble Lord's amendment the burden of proof—admittedly to the lower standard, on the balance of probabilities—is on the defendant. The amendment is inconsistent with what is left in the new government amendments and is actually less favourable to the defendant.

Lord Falconer of Thoroton: I completely agree with what the noble Lord, Lord Goodhart, has said, particularly on the burden of proof. This is less favourable to the defendant. The prosecution has to prove beyond reasonable doubt either knowledge or that the individual "ought reasonably to have known". This defence would have to be proved by the defence on the balance of probabilities. I adopt all that the noble Lord, Lord Goodhart, has said and have nothing to add to the brilliant way in which he said it. I, therefore, invite the noble Lord, Lord Kingsland, to withdraw his amendment.

Lord Kingsland: The noble and learned Lord, Lord Falconer, may have no fear: I will certainly withdraw my amendment for now. But with great respect to the noble Lord, Lord Goodhart—and therefore by inference to the noble and learned Lord the Lord Chancellor, who adopted in its entirety the judgment of the noble Lord, Lord Goodhart—there is a great deal of difference between the two amendments. My amendments require that the treasurer takes all reasonable steps for a treasurer in his position. In my view, that is a much more generous test for the treasurer than the test laid down by the Government, which is "ought reasonably to have known".
	I find it a real jurisprudential challenge to be up against both the noble and learned Lord and the noble Lord; but it is one I am quite prepared to take on and shall return to on Report. In the meantime, I beg leave to withdraw the amendment.

Lord Goodhart: I want to ask one short question on Amendment No. 1. Does the noble and learned Lord agree that Part 4 and Part 4A are not cumulative, so that it would be possible, without disclosure, for any individual who was a permissible donor to make in the same year both a donation of £5,000 and a loan of £5,000 without having to disclose either of them? If that is correct, ought there not to be some method of accumulating the two so that in those cases there would have to be some disclosure?
	We are talking of £10,000, which I recognise is not enormous compared with some of the sums that have been lent. However, I wonder whether the point has been considered and, if not, whether it should be.